The Italian was criticised for playing the midfielder on the left wing.
Capello explained he was using Gerrard in a 4-3-2-1 system, with the Liverpool captain and Wayne Rooney supporting Jermain Defoe as a main striker.
"The position he had to play was in the line of the full-backs and midfield," he said. "He never played on the left."
Capello sought to get the best out of Liverpool's influential captain and Chelsea's Frank Lampard in the same line-up, a conundrum that has dogged his predecessors in the England job.
On this occasion he opted to partner Lampard with Gareth Barry in the middle with David Beckham to the right of the trio.
Only a last-minute goal from Cole saved England from defeat at Wembley, but Capello drew some positives from the salvaged draw, saying the performance was another step forward for his side ahead of World Cup qualifying campaign which begins in Andorra on 6 September.
He was also concerned by the ease in which England were exposed by a fast counter-attacking Czech side and admitted it is something they will need to work on.
"I think in the first half we played well, we had a lot of chances.
"After the second goal from the Czechs, the direction was not so strong."